Income Statement - Problems

Income Statement – Problems 1. Kim Company reported the following data for the current year: Legal and audit fees 1,700,000 Rent for office space 2,400,000 Interest on inventory loan 2,100,000 Loss on abandoned data processing equipment 350,000 Freight in 1,750,000 Freight out 1,600,000 Officers' Salaries 1,500,000 Insurance 850,000 Sales representative salaries 2,150,000 Research and development expense 1,000,000 The office space is used equally by the sales and accounting departments. What amount should be classified as general and administrative expenses? a. 5,250,000 b. 6,450,000 c. 5,600,000 d. 6,250,000 Answer: A 2. Eddie Company provided the following information for the current year: Net accounts receivable at January 1,900,000 Net accounts receivable at December 31 1,000,000 Accounts receivable turnover 5 to 1 Inventory at January 1 1,100,000 Inventory turnover 4 to 1 What is the gross income for the current year? a. 150,000 b. 200,000 c. 300,000 d. 400,000 Answer: A 3. Arellano Company provided the following data for the current year: Inventory, January 1 2,000,000 Purchases Purchase returns and allowances 500,000 Sales returns and allowances

7,500,000 750,000

Inventory on December 31 2,800,000 Gross profit rate on sales What is the cost of goods sold? a. 6,700,000 b. 6,200,000 c. 7,200,000 d. 9,000,000 Answer: B

20%

4. Marlin Company incurred the following costs and expenses during the current year: Raw material purchases 4,000,000 Direct labor 1,500,000 Indirect labor - factory 800,000 Factory repairs and maintenance 200,000 Taxes on factory building 100,000 Depreciation - factory building 300,000 Taxes on salesroom and general office 150,000 Depreciation - sales equipment 50,000 Advertising 400,000 Sales salaries 500,000 Office salaries 700,000 Utilities - 60% applicable to factory 500,000 Beginning Ending Raw Materials 300,000 450,000 Work in process 400,000 350,000 Finished goods 500,000 700,000 What is the cost of raw materials used? a. 3,850,000 b. 4,000,000 c. 4,150,000 d. 4,750,000 Answer: A 5. Hongsa Company reported that the financial records were destroyed by fire at the end of the current year. However, certain statistical data related to the income statement are available. Interest expense 200,000 Cost of goods sold 3,000,000 Sales discount 300,000 The beginning inventory was P500, 000 and decreased 20% during the year. Administrative expenses are 25% of cost of goods sold but only 10% of gross sales. Distribution cost represent 70% of the operating expenses What is the amount of gross sales? a. 7,500,000 b. 8,000,000 c. 4,500,000 d. 5,000,000 Answer: A 6. Mila Company had the following events and transactions during 2018:  Depreciation for 2016 was understated by P300,000  A litigation settlement resulted in a loss of P250,000  The inventory on December 31, 2016 was overstated by P200,000

 The entity disposed of a recreational division at a loss of P600,000  The income tax rate is 30% What is the effect of these events on the income from continuing operations for 2018? a. 175,000 b. 385,000 c. 665,000 d. 750,000 Answer: A 7. Amanda Company provided the following information for the current year: Sales 50,000,000 Cost of goods sold 30,000,000 Distribution costs 5,000,000 General and administrative expenses 4,000,000 Interest expense 2,000,000 Gain on early extinguishment of long-term debt 500,000 Correction of inventory error, net of income tax - credit 1,000,000 Investment income - equity method 3,000,000 Gain on expropriation 2,000,000 Income tax expense 5,000,000 Dividends declared 2,500,000 What is the income from continuing operations? a. 9,000,000 b. 8,000,000 c. 9,500,000 d. 7,000,000 Answer: C 8. Marianne Company provided the following information for the current year: Sales 9,500,000 Interest revenue 250,000 Gain on sale of equipment 100,000 Revaluation surplus during the year 1,200,000 Share of profit of associate 350,000 Cost of goods sold 6,000,000 Finance cost 150,000 Distribution costs 500,000 Administrative expenses 300,000 Translation loss on foreign operation 200,000

Income tax expense 950,000 What is the net income for the current year? a. 2,300,000 b. 3,300,000 c. 4,200,000 d. 2,100,000 Answer: A 9. Matt Company accounted for noncurrent assets using the cost model. On October 1, 2018, the entity classified a noncurrent asset as held for sale. At that date, the carrying amount was P3,200,000, the fair value was estimated at P2,200,000 and the cost of the disposal at P200,000. On December 15, 2018, the asset was sold for net proceeds of P1,850,000. What amount should be included as an impairment loss in the statement of comprehensive income for the year ended December 31, 2018? a. 1,000,000 b. 1,200,000 c. 1,350,000 d. 0 Answer: B 10. Emma Company accounted for noncurrent assets using the cost model. On October 30, 2018, the entity classified a noncurrent asset as held for sale. At that date, the carrying amount was P1,500,000, the fair value was estimated at P1,100,000 and the cost of disposal at P150,000. On November 20, 2018, the asset was sold for net proceeds of P800,000. What amount should be reported as impairment loss for 2018? a. 550,000 b. 400,000 c. 700,000 d. 0 Answer: A 11. On January 1, 2018, Rina Company purchased land at a cost of P6,000,000. The entity used the revaluation model for this asset. The fair value of the land was P7,000,000 on December 31, 2018 and P8,500,000 on December 31, 2019. On July 1, 2020, the entity decided to sell the land and therefore classified the asset as held for sale. The fair value of the land on this date is P7,600,000. The estimated cost of disposal is very minimal. On December 31, 2020, the land was sold for P8,000,000. What amount in OCI should be recognized in the statement of comprehensive income for the year ended December 31, 2019? a. 2,500,000 b. 1,500,000 c. 400,000 d. 900,000

Answer: B 12. Lisa Company accounted for noncurrent assets using the revaluation model. On October 1, 2018, the entity classified a land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At same date, the fair value of the land was estimated at P5,500,000 and the cost of disposal at P100,000. On December 31, 2018, the fair value less cost of disposal of the land did not change. The land was sold on January 31, 2019 for P6,000,000. What amount should be reported as gain on disposal of land in 2019? a. 1,000,000 b. 2,600,000 c. 500,000 d. 600,000 Answer: D 13. On April 1, 2018, Sebastian Company had a machine with a cost of P5,000,000 and accumulated depreciation of P3,750,000. On April 1, 2018, the entity classified the machine as held for sale and decided to sell the machine within one year. On April 1, 2018, the machine had an estimated selling price of P500,000 and a remaining useful life of 2 years. It is estimated that the selling cost associated with the disposal of the machine will be P50,000. On December 31, 2018, the estimates selling price of the machine had increased to P750,000 with estimated selling cost of P100,000. What amount should be recognized as gain on reversal of impairment on December 31, 2018? a. 468,750 b. 368,750 c. 300,000 d. 200,000 Answer: D 14. ART Company purchased equipment for P5,000,000 on January 1, 2018 with a useful life of 10 years and no residual value. On December 31, 2019, the entity classified the equipment as held for sale. The fair value of the equipment on December 31, 2019 was P3,300,000 and the cost of disposal P100,000. On December 31, 2020, the fair value of the equipment was P3,800,000 and the cost of disposal P200,000. The value in use was determined to be P3,300,000. On December 31, 2020, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the asset but to continue to use it. What is the measurement of the equipment that ceases as held for sale on December 31, 2020? a. 3,200,000 b. 4,000,000 c. 3,500,000 d. 3,600,000 Answer: C

15. On September 30, 2018, when the carrying amount of the net assets of a business segment was P70,000,000, Ying Company signed a legally binding contract to sell the business segment. The sale is expected to be completed by January 31, 2019 at a sale price of P60,000,00. In addition, prior to January 31, 2019, the sale contract obliged Ying Company to terminate the employment of certain employees of the business segment incurring an expected termination cost of P5,000,000 to be paid on June 30, 2019. The segment revenue and expenses for 2018 were P40,000,000 and P45,000,000 respectively. The income tax rate is 30%. What amount should be reported as loss from discontinued operation for 2018? a. 14,000,000 b. 20,000,000 c. 15,000,000 d. 10,500,000 Answer: A 16. Jennie Company, an investment entity, provided the following income and expenses for the current year: Dividend income from investments 9,200,000 Distribution income from trusts 500,000 Interest income on deposits 700,000 Income from bank treasury bills 100,000 Unrealized gain on derivative contract as cash flow hedge 400,000 Income from dealing in securities and derivatives held for trading 600,000 Write-down of securities and derivatives held for trading 150,000 Other income 250,000 Finance cost 300,000 Administrative staff costs 3,800,000 Sundry administrative costs 1,200,000 Income tax expense 1,700,000 What is the net income for the current year? a. 5,900,000 b. 3,700,000 c. 4,200,000 d. 5,500,000 Answer: C

17. ASH Company reported operating expenses in two categories, namely distribution and general administrative. The adjusted trial balance at year-end included the following expense and loss accounts for current year. Accounting and legal fees 1,200,000 Advertising 1,500,000 Freight out 800,000 Interest 700,000 Loss on sale of long-term investment 300,000 Officers' salaries 2,250,000 Rent for office space 2,200,000 Sales salaries and commission 1,400,000 One-half of the rented premises is occupied by the sales department. What amount should be reported as total distribution costs? a. 4,800,000 b. 4,000,000 c. 3,700,000 d. 3,600,000 Answer: A 18. Kawasaki Company provided the following information for the current year: Beginning inventory 400,000 Freight in 300,000 Purchase Returns 900,000 Ending inventory 500,000 Selling expenses 1,250,000 Sales discount 250,000 The cost of goods sold is six times the selling expenses. What is the amount of gross purchases? a. 6,500,000 b. 6,700,000 c. 8,000,000 d. 8,200,000 Answer: D 19. ANS Company provided the following information for the current year: Increase in raw materials inventory 150,000 Decrease in goods in process inventory 200,000 Decrease in finished goods inventory 350,000 Raw materials purchased 4,300,000 Direct labor payroll 2,000,000 Factory overhead 3,000,000 Freight out 450,000

Freight in What is the cost of goods sold for the current year? a. 9,950,000 b. 9,550,000 c. 9,250,000 d. 9,150,000 Answer: A

250,000

20. SUN Company showed cost of goods sold of 4,320,000 in the statement of comprehensive income after the first year of operations. The total manufacturing cost comprised the following: Materials used 50% Direct labor incurred 30% Manufacturing overhead 20% Goods process in year-end amounted to 10% of the total manufacturing cost. Finished goods at year-end amounted to 20% of the cost of goods manufactured. What is the amount of the direct labor cost incurred? a.1,800,000 b. 2,400,000 c. 3,000,000 d. 5,400,000 Answer: A 21. Luisa Company reported operating expenses other than interest expense for the year at 40% of cost of goods sold but only 20% of sales. Interest expenses is s5% of sales. The amount of purchases is 120% of cost of goods sold. Ending inventory is twice as much as the beginning inventory. The net income for the year is 2,100,000. The income tax rate is 30%. What is the amount of purchases? a. 6,000,000 b. 7,200,000 c. 3,000,000 d. 3,600,000 Answer: B 22. Thor Company reported net income of 7,500,000 for the current year which included the following amounts: Unrealized loss on foreign currency translation (500,000) Gain on early retirement of bonds payable 2,200,000 Adjustment of profit of prior year for error in depreciation, net of tax effect (750,000) Loss from fire (1,400,000) What amount should be reported as adjusted net income?

a. 6,250,000 b. 9,500,000 c. 8,000,000 d. 8,750,000 Answer: D 23. Swing Company reported income before tax of 5,000,000 for the current year which included the following amounts: Equity in earnings of Cinn Company - 40% interest 1,600,000 Dividend received from Cinn Company 400,000 Adjustment of profit of prior year for arithmetical error in depreciation (5,000,000) Gain on sale of equity investment at FVOCI 1,000,000 What amount should be reported as income before tax? a. 4,100,000 b. 4,600,000 c. 5,500,000 d. 5,100,000 Answer: A 24. Kean Company provided the following information for the current year: Income from continuing operations 4,000,000 Income from discontinued operation 500,000 Unrealized gain on financial asset - FVPL 800,000 Unrealized loss on equity investment – FVOCI 1,000,000 Unrealized gain on debt investment - FVOCI 1,200,000 Unrealized gain on futures contract designated as a cash flow hedge 400,000 Translation loss on foreign operation 200,000 Net "remeasurement" gain on defined benefit plan 600,000 Loss on credit risk of a financial liability at FVPCL 300,000 Revaluation surplus during the year 2,500,000 What amount should be reported as net income for the current year? a. 5,200,000 b. 7,700,000

c. 8,500,000 d. 7,200,000 Answer: B 25. Marimae Company provided the following information for the current year: Sales 5,000,000 Cost of goods sold 2,800,000 Foreign translation adjustment - credit 400,000 Selling Expenses 700,000 Unusual and infrequent gain 400,000 Correction of inventory error 200,000 General and administrative expenses 600,000 Income tax expense 150,000 Gain on sale of investment 50,000 Proceeds from sale of land at cost 800,000 Dividends 300,000 What amount should be reported as income from continuing operations? a. 1,200,000 b. 1,350,000 c. 1,600,000 d. 2,000,000 Answer: A 26. Leona Company accounted for noncurrent assets using rhe cost model. On October 30, 2018, the entity classified a noncurrent asset as held for sale. At that date, the carrying amount was 1,500,000, the fair value was estimated at 1,100,000 and the cost of disposal at 150,000. On November 20, 2018, the asset was sold for net proceeds of 800,000. What amount should be included as loss on disposal in the statement of comprehensive income for the year ended December 31, 2018? a. 550,000 b. 700,000 c. 150,000 d. 0 Answer: C 27. Ballot Company committed to sell the comic book division, a component of the business, on September 1, 2018. The carrying amount of the division was 4,000,000 and the fair value was 3,500,000. The disposal date is expected on June 1, 2019. The division reported an operating loss of 200,000 for the year ended December 31, 2018.

What amount should be reported as pretax loss from discontinued operation in 2018? a. 500,000 b. 200,000 c. 700,000 d. 0 Answer: C 28. David Company decided on August 1, 2018 to dispose of a component of a business. The component was sold on November 30, 2018. The net income for the current year included income of 5,000,000 from operating the discontinued segment from January 1 to the date of disposal. The entity incurred a loss on the November 30 sale of 4,500,000. What amount should be reported as pretax income or loss from discontinued operation for 2018? a. 4,500,000 loss b. 5,000,000 income c. 500,000 loss d. 500,000 income Answer: D 29. Vince Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components. The firm equipment component had been unprofitable and on September 1, 2018, the entity adopted a plan to sell the assets of the division. The actual sale was effected on December 15, 2018 at a price of 3,000,000. The carrying amount of the division's assets was 5,000,000. The division incurred before-tax operating loss of 1,500,000 from the beginning of the year through December 15, 2018. The entity's after-tax income from continuing operations is 9,000,000. The income tax rate is 30%. What amount should be reported as net income for the current year? a. 5,500,000 b. 6,500,000 c. 6,300,000 d. 7,600,000 Answer: B 30. In 2018, Hanabishi Company decided to discontinue the Electronics Division, a separately identifiable component of Isuzu's business. On December 31, 2018, the division had not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner and it is probable that the disposal will completed within a year. Analysis of the records for the year disclosed the following relative to the Electronic Division: Operating loss for the current year 8,000,000

Loss on disposal of some Electronic Division assets during 2018 500,000 Expected operating loss in 2019 preceding final disposal 1,000,000 Expected gain in 2019 on disposal of division 2,000,000 What amount should be reported as pretax loss from discontinued operation in 2018? a. 8,000,000 b. 8,500,000 c. 9,500,000 d. 7,500,000 Answer: B 31. On December 31, 2018, Armani Company committed to a plan to discontinue the operations of Underwear Division. The fair value of the facilities was 1,000,000 less than carrying amount in 2019. The division's operating loss for 2018 was 2,000,000 and the division was actually sold for 1,200,000 less than carrying amount in 2019. The entity estimated that the division's operating loss for 2019 would be 500,000. What amount should be reported as pretax loss from discontinued operation in 2018? a. 3,000,000 b. 2,000,000 c. 1,000,000 d. 3,200,000 Answer: A 32. Wall Company has two divisions, North and South. Both qualify as business components. In 2018, the entity decided to dispose of the assets and liabilities of division South and it is probable that the disposal will be completed early next year. The revenue and expenses of Wall Company are as follows: 2018 2017 Sales-North 5,000,000 4,600,000 Total nontax expenses – North 4,400,000 4,100,000 Sales-South 3,500,000 5,100,000 Total nontax expenses – South 3,900,000 4,500,000 During the later part of 2018, the entity disposed of a portion of division South and recognized a pretax loss of 2,000,000 on the disposal. What amount should be reported as pretax loss from discontinued operation in 2018? a. 2,000,000 b. 2,400,000 c. 1,400,000 d. 1,600,000 Answer: B

33. A company’s’ beginning shareholders’ equity is 500,000,000, its net income for the year is 50,000,000, its cash dividends for the year are 5,000,000, and the company did not issue or repurchase any of its stock. If the company’s actual ending shareholders’ equity is 570,000,000, what is its comprehensive income? a. 25,000,000 b. 75,000,000 c. 50,000,000 d. 0 Answer: B 34. Lexi Corporation’s information are provided for the current year:  Sales  Cost of Goods Sold  Salaries and Wages  Rent Expense 15,000  Advertising Expense 35,000  Cost of repairs resulting from fire What is Lexi Corporation’s net income for the year? a. 160,000 b. 60,000 c. 40,000 d. 50,000 Answer: C

260,000 100,000 20,000

50,000

35. A Company XYZ has an investment of 10,000 in stocks in which it holds for trading purposes. The value of these stocks has increased to 25,000. The company sold these positions for 30,000. What amount should the company record its unrealized gain? a. 15,000 b. 10,000 c. 55,000 d. 20,000 Answer: D 36. EXterna Company prepared the following information in its first year of operation: Consulting Revenue 50,000 Rent Expense 5,000 Software Licensing Fees 3,000 Dividends Paid 6,000 Advertising Expense 20,000

What is the net income for the first year of operation of the company? a. 22,000 b. 16,000 c. 19,000 d. 20,000 Answer: A 37. Fenn Company had sales of P5,000,000 during December 2011. Experience had shown that merchandise equaling 7% of sales will be returned within 30 days and an additional 3% will be returned within 90 days. Returned merchandise is readily resalable. In addition, merchandise equaling 15% of sales will be exchanged for merchandise of equal or greater value. What amount should Fenn report for net sales in its income statement for the month of December 2011? a. 4,500,000 b. 4,250,000 c. 3,900,000 d. 3,750,000 Answer: A 38. On July 1,2011, Loveluck Company, a manufacturer of office furniture, supplied goods to Kaye Company for P1,200,000 on condition that this amount is paid in full on July 1, 2012. Kaye had earlier rejected an alternative offer from Loveluck whereby it could have bought the same goods by paying cash of P1,080,000 on July 1,2011. What amount should be respectively be recognized as sales revenue and interest income for the year ended June 30, 2012? a. 1,080,000 and 120,000 b. 1,200,000 and 120,000 c. 1,080,000 and 0 d. 1,200,000 and 0 Answer: A 39. Emco Company has the following transactions in 2011:  Emco sells goods to a customer for P50,000 FOB shipping point on December 30, 2011.  Emco sells three pieces of equipment on a contract over a three-year period. The sale price of each piece of equipment is P100,000. Delivery of each piece of equipment is on February 10 of each year. In 2011, the customer paid a P200,000 down payment, and will pay P50,000 per year in 2012 and 2013. Collectability is reasonably assured.  On June 1, 2011, Emco signs a contract for P200,000 for goods to be sold on account. Payment is to be made in two installments of P100,000 each on December 1, 2011 and December 1, 2012. The goods are delivered on October 1, 2011. Collection is reasonably assured and the goods may no be returned.  Emco sells goods to a customer on July 1, 2011 for P500,000. If the customer does not sell the goods to retail customers by December 31, 2012, the goods can

be returned to Emco. The customer sells the goods to retail customers on October 1, 2012. What amount of sales revenue should be reported in the 2011 income statement? a. 350,000 b. 850,000 c. 450,000 d. 550,000 Answer: A 40. On January 1, 2011, Alexis Company purchased marketable equity securities to be hels as "trading" for P5,000,000. The entity also paid commission, taxes, and other transaction costs amounting to P200,000.The securities had a market value of P5,500,000 on December 31, 2011 and the transaction costs that would be incurred on sale are estimated at P110,000. No securities were sold during 2011. What amount of unrealized gain or loss on these securities should be reported in the 2011 income statement? a. 500,000 unrealized gain b. 500,000 unrealized loss c. 300,000 unrealized gain d. 400,000 unrealized gain Answer: A

41. Carmela Company acquired a financial instrument for P4,000,000 on March 31,2011. The financial instrument is classified as financial asset at fair value through other comprehensive income. The direct acquisition costs incurred amounted to P700,000. On December 31, 2011, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimatedat P600,000. What gain should be realized in other comprehensive income for the year ended December 31, 2011? a. 200,000 b. 900,000 c. 800,000 d. 0 Answer: C 42. A portion of the adjusted trial balance for the G Company is shown below. Sales (net of $8,000 sales discounts and 24,500 sales returns and allowances) 417,500 Cost of goods sold $210,000 Salaries expense 38,000 Depreciation expense—building 40,000 Advertising expense 12,300 Office supplies expense 3,500 Gain on disposal of store equipment 3,000 Interest expense 1,000. What is the total net income of the company? a. 115,700 b. 117,500 c. 108,500 d. 105,800

Answer: A 43. The company KHB have a Service Revenue of 160,000 for the year 2019. On that year KHB Company recorded the following: Salaries Expense 40,000 Supplies Expense 26,100 Rent Expense 20,500 Utilities Expense 11,300 Depreciation Expense 5,000 Revaluation Surplus 20,000 Unrealized Translation Gain 10,200 How much is the total of other comprehensive income? a. 102,900 b. 57,100 c. 30,200 d. 87,300 Answer: C 44. Hero Company had the following in their statement of comprehensive income for the year ended December 31, 2020. Compute for their income before tax. Revenue 734,000 Gain in the fair value of investment property 1,000 Changes in inventories of finished goods and work in progress 26,480 Raw material and consumables used 378,000 Employee benefits expense 78,000 Depreciation and amortisation expense 25,600 Advertising costs 3,000 Raw material freight costs 2,000 Operating lease expense 400 Finance costs 22,300 Share of associate’s losses 100 Income tax expense 49,780 Loss for the year from discontinued operations 24,780

a. 199,120 b. 149,340 c. 124,560 d. 136,840 Answer: A 45. Company Ghie has income from continuing operations of 700 million. During the year it disposed-off one of its segments Segment A for 120 million. The segment earned revenue of 200 million and incurred costs of 150 million. Its book value was 100 million. Tax rate applicable to the company overall and the segment is 35%. What is the net income for the period for the company. a. 430 million b. 580 million c. 739.5 million d. 726.5 million Answer: C 46. An entity operates two separate major lines of business—candle manufacturing and clothing retailing. On 30 December 2020, in response to an unsolicited offer, an entity disposed of its candle-making operation for 1,000,000 when the carrying amount of the operation’s assets were—factory building 400,000, machinery 300,000 and trade mark 200,000. For simplicity it is assumed that the candle-making operation has no other assets or liabilities. 20,000 income tax is payable on the gain on disposal of the plant. The candle-making plant recognised a profit after tax of 150,000 for the year ended 31 December 2020. What is the total post-tax profit from the discontinued operation? a. 0 b. 230,000 c. 250,000 d. 100,000 Answer: B 47. DairyComapny provided the following balances for the year ended December 31,2011: Cash 500,000 Trade and other receivables 1,500,000 Inventories 100,000 Dairy livestok - immature 50,000 Dairy livestock - mature 400,000 Property, plant and equipment, net 1,400,000 Trade and othe payables 520,000 Note payable - long term 1,500,000 Share capital 1,000,000

Retained earnings - January 1 Fair value of milk produced 600,000 Gain from change in fair value Inventories used Staff costs Depreciation expense Other operating expenses Income tax Expense 55,000 What is the net income for 2011? a. 650,000 b. 600,000 c. 130,000 d. 185,000 Answer: C

800,000 50,000 140,000 120,000 15,000 190,000

48. Cobb Company purchased 10,000 shares representing 2% ownership of Roe Company on February 15, 2011. Cobb received a stock dividend of P2,000 shares on March 31, 2011, when the carrying amount per share on Roe's books was P350 and the market value per share was P400. Roe paid a cash dividend of P15 per share on September 15, 2011. In the income statement for the year ended October 31, 2011, what amount should Cobb reported as dividend income? a. 980,000 b. 880,000 c. 180,000 d. 150,000 Answer: C